We've got a huge problem on our hands over the next several years. Student loan debt is nearing $1 trillion and default rates are skyrocketing with taxpayers holding the bag. Throwing endless amounts of money at higher education has got to stop... the cost of higher education is growing at 2.5x's the inflation rate since 1985... The market cannot adapt if there’s no such thing as a breaking point for cost.

re: Student-Loan Delinquencies Now Surpass Credit CardsPosted by nikki6 on 11/28/12 at 1:58 pm to DontTazeMeBro

I agree. And they should find some way to make the student use the loan only on school. I knew kids who took loans every semester and used the money for booze, cigarettes, and junk food. These same tools are now whining about their debt and hoping that Obama decides to forgive all the loans and stating how that would stimulate the economy better than anything else. I've got loans, but I pay them every month. I took them, I can pay for them.

re: Student-Loan Delinquencies Now Surpass Credit CardsPosted by nikki6 on 11/28/12 at 4:25 pm to cjared036

I believe they've done things to help. As someone on this board pointed out to me before, there is income sensitive repayment options. I also believe you can have the payments put on hold for a time if something catastrophic happens to your finances, ie lose a job etc. I think there are a lot of people out there who took loans they didn't really need, or took more than they needed b/c they govt was handing them out. I don't think they should be forgiven.

With that being said, however, I'd rather the govt bail out it's citizens with debt forgiveness than have them bail out big business.

re: Student-Loan Delinquencies Now Surpass Credit CardsPosted by RetiredG8tr on 11/28/12 at 5:20 pm to nikki6

nikki6,

Who do you think is on the hook for those loans? What if Obama pulls another GM? Average, middle-class citizens will lose money. You know, pension plans, 401ks, etc.

Remember, Obama bragged about taking away student loans from big business (bankers) and now we have a student loan bubble. Go figure, a college administering a student loan program? Talk about a self-interest conflict....

re: Student-Loan Delinquencies Now Surpass Credit CardsPosted by schexyoung on 11/28/12 at 5:29 pm to DontTazeMeBro

Student Loan debt is essentially money chasing money...

With the government acting loose and free with funding for student loans there are more "unqualified" students attending school. The aforementioned demand causes an increase in tution which then requires more student aid. The government further lossens student loan credit requirements....repeat.

Without government intervention the following would likely be required: - The job market and earning potential of the degree would determine the loan amount (sorry art history and french lit; welcome engineering, medical, accounting, etc.); - Semester grade updates would be required for continued funding; and - Banks would DIRECTLY deposit funding into escrow accounts that requried only qualified disbursements (tution, books, etc.). Sorry no more partying and buying cars with student aid.

I'm 62 and can tell you I have been debt free since I was 42. Including cars, mortgage, credit cards, etc.

If the interest on your debt is less than the interest you can borrow, keep the debt. But, soon interest rates will return to their norms. If you have a fixed interest rate and it is below the 10-yearTB, keep it. It might FU your credit score.

Remember, let you money work for you...not you working for your money..

quote:So far YTD (and I know I need to make some changes on this, and some will come back to me), I've had over $16,000 withheld in Medicare, SS, Fed and State taxes.

If you've had that much deducted from your paychecks YTD, then you should be able to pay off your student loans quickly. It sounds like the student debt is not your problem but rather your lifestyle and financial situation because it appears as though you make enough to be able to bear down and pay off the student loans. But then again, I don't know you or your financial situation and my comments are merely an assumption based on your stated situation so don't take it as an attack or whatnot.

If you don't mind me asking, How much do you have in student debts, other debts (credit cards, car loans, etc.) and how much is your yearly income before and after all deductions? I'd also imagine if you have that much being deducted you also have portions of your paycheck being directed towards contributions for a 401k.

re: Student-Loan Delinquencies Now Surpass Credit CardsPosted by DallasTiger11 on 11/28/12 at 8:45 pm to LSUwag

Here is another disaster caused by the meddling of the government. Student loans are way too easy to get now because "it is a fundamental right that everybody goes to college." Hmm....sound familiar? Just like it used to be a fundamental right that everyone owned a home and it will be a fundamental right that everyone has healthcare.

The federal government(specifically the dems) will never learn that when they manipulate markets like this all it does is end up a disaster.

Student loans need to be treated just like every other loan - likeliness to repay. If you are an Art major at some shitty Art school pay for college yourself. I am so sick of everyone thinking they are entitled to everything.

re: Student-Loan Delinquencies Now Surpass Credit CardsPosted by LSUwag on 11/28/12 at 9:00 pm to DallasTiger11

quote:fundamental right

Absolutely. They have created yet another entitlement program knowing full well that a lot of these loans will never be repaid. I deal with convicted felons in my line of work. I've seen a lot of them take out massive student loans and attend what are basically fake school to learn trades and such. What they are really doing is borrowing money for their daily living expenses instead of working. It is a complete scam. We will have to bail this program out very soon.

When this bubble bursts, legitimate students will be punished with less loans being available and higher interest rates and more difficult terms.

re: Student-Loan Delinquencies Now Surpass Credit CardsPosted by theOG on 11/29/12 at 8:18 am to drewnbrla

quote:It sounds like the student debt is not your problem but rather your lifestyle and financial situation because it appears as though you make enough to be able to bear down and pay off the student loans.

quote:What are the consequences of default? The consequences of default can be severe: The entire unpaid balance of your loan and any interest is immediately due and payable. You lose eligibility for deferment, forbearance, and repayment plans. You lose eligibility for additional federal student aid. Your loan account is assigned to a collection agency. The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card. Your federal and state taxes may be withheld through a tax offset. This means that the Internal Revenue Service can take your federal and state tax refund to collect any of your defaulted student loan debt. Your student loan debt will increase because of the late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process. Your employer (at the request of the federal government) can withhold money from your pay and send the money to the government. This process is called wage garnishment. The loan holder can take legal action against you, and you may not be able to purchase or sell assets such as real estate. Federal employees face the possibility of having 15% of their disposable pay offset by their employer toward repayment of their loan through Federal Salary Offset. It will take years to reestablish your credit and recover from default.

unless they allow student loans to be discharged through BK, the borrower is the one directly on the hook. The economy is indirectly on the hook as they will not be able to buy (or afford) a house and buy a car....